FA Cup semi finalists and Championship play off hopefuls Cardiff City, have been in court for the last two days fighting legal action against Swiss based financiers The Langston Corporation.
Former Cardiff chairman Sam Hammam has been named as the man behind the banks demand for immediate repayment of loans totalling £31million.
The Langston Corporation claims the club has failed to make a repayment on the loan since 2004. Cardiff City say that a variation to the agreement means that no payment is due until 2016.
The High court is considering Langston’s application for summary judgement, meaning that a judge will decide whether to rule in Langston’s favour, without the need for a full trial.
Should the court rule in Langston’s favour, the financiers will demand immediate payment in full from Cardiff City. If the judge decides that a full trial is required it would take up to two years to reach the court, giving Cardiff some breathing space.
Judgement in favour of Langston’s at this stage will mean that the club would have no alternative than to go into administration.
Confusingly, the original loan was taken out by former chairman Sam Hammam , the man behind the Langston’s claim. The court is expected to make a decision by the end of the week.
Current chairman Peter Risdale, insists that the loan notes were re negotiated in 2006, two years after the original loan was agreed, and he says;
“The club does not have any cause to believe that this signed document is invalid, and consequently it does not consider that it has any debts repayable to Langston prior to 2016.”
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